Industry Trends/Blog

New home sales at 7-month high in November

Fri, Dec 23 2011

WASHINGTON (Reuters) - New U.S. single-family home sales rose to a seven-month high in November and the months' supply of houses on the market was the lowest in 5-1/2 years, adding to signs of a budding recovery in the sector.

The Commerce Department said on Friday sales rose 1.6 percent to a seasonally adjusted 315,000-unit annual rate. Octobers' sales pace was revised up to 310,000 units from the previously reported 307,000 units.

Economists polled by Reuters had forecast sales at a 313,000-unit rate. In the 12 months through November, new home sales were up 9.8 percent.

Coming on the heels of data this week showing a rise in sales of previously owned homes and surge in housing starts, the report implied a recovery was starting to take shape in the housing market.

The housing market, which triggered the 2007-09 recession, remains constrained by an oversupply of unsold homes, falling prices and high unemployment.

Sales were up in two of the four regions, with the number of homes sold in the Midwest the highest since November 2009.

The median sales price for a new home fell 3.8 percent to $214,100 last month. Compared to November last year, the median price was down 2.5 percent.

There were a record low 158,000 new homes on the market last month and at November's sales pace, it will take 6 months to clear them - the shortest amount of time since March 2006. That compared to 6.2 months in October.

A 6-month supply is generally considered ideal, with higher readings indicating steep price declines.

Outlook Rosier for Housing Market

January 20, 2012

The Daily Real Estate News is reporting that several recent indicators in the real estate industry are pointing to recovery in the market. According to reports in USA Today and Deseret News, housing experts’ predictions for the new year are trending toward a market stabilization before entering a gradual, albeit very slow, recovery. This tone is more upbeat than it has been in years for the housing market.

Experts are making several key predictions:

Home sales: Existing home sales are expected to increase 12 percent this year, following a 2 percent jump last year, Moody’s Analytics predicts. The signs are already showing: In November, pending home sales — a gauge for future home buying — reached its highest level in 19 months, the National Association of Realtors reported.More on this at Realtor.org.

New-home market: Coming off of what could be considered the worst year for new-home building ever recorded, the sector is expected to bounce back this year. New-home sales and starts were already showing a rebound in the last few months of 2011. Moody’s is predicting that single-family housing starts will increase 37 percent this year, and new-home sales will soar 74 percent.Housing stocks: Investors are starting to get optimistic about the possibility of a rebound too, and are turning to home builder stocks. These equities have recently outperformed the broader stock market and the S&P 1500 homebuilding index has increased 38 percent since mid-October, USA Today reports.

Consumer confidence: With mortgage rates at record lows and housing affordability high, about 71 percent of Americans say now is a good time to purchase a home. Also, more Americans are optimistic that home prices will rise over the next year — about 26 percent say prices will rise in 2012, an increase of 4 percent over the last survey, according to Fannie Mae’s December National Housing Survey.